Malaysiakini 10 September 2015

Malaysia has vastly improved its score in this year’s Open Budget Index, moving it up from the ‘minimal (budget information)’ category to the ‘limited (budget information)’ category.

However, Malaysia’s performance in two other areas scored in the Open Budget Survey remains poor. The results were released today with the Malaysian launch being held in Kuala Lumpur.

Malaysia scored a measly 12 points out of 100 on the level of public participation in the annual budget cycle, earning a ‘weak’ rating in the area.

On the degree of budget oversight, Malaysia is given the rating ‘weak’ (15 points) on parliamentary oversight, and ‘adequate’ (67 points) on oversight by supreme audit institutions, which in Malaysia’s case refers to the National Audit Department.

“Malaysia’s score on the Open Budget Index in the last two Open Budget Surveys in 2010 and 2012 was 39, but this has improved to 46 points out of 100.”

This places Malaysia at the 49th position, out of 102 countries, compared to 60th out of 100 countries in 2012. The score of 46 is also just one point above the global average.

‘Mixed results’ for M’sia

In comparison, the top scorer for this year’s survey is New Zealand with 88 points.

Malaysia is also outpaced by South Korea (65 points), Philippines (64 points), and Indonesia (59 points), but performs better than Thailand (42 points) and Timor-Leste (41 points)

In a statement, Ideas CEO Wan Saiful Wan Jan described the survey findings as ‘mixed results’.

“The improvement in the transparency score may please the government, but the improvement by seven points is hardly substantial.

“There are still many transparency steps that need to be done by the government if we want to become much better,” he said.

Malaysia was rated as having ‘moderate’ legislative oversight, ‘strong’ audit oversight, and ‘weak’ public participation in the 2012 survey, but these are not directly comparable with this year’s result due to a change in methodology.

However, the survey’s researcher Sri Murniati told reporters after the launch of the results that Malaysia’s actual improvement is only in the Open Budget Index, whereas all other areas remain the same as previous years.

The improvement is attributed almost entirely to the fact that the Auditor-General’s Report is now published three times a year instead of only once a year, and his department’s website features a ‘dashboard’ that informs the public whether there is follow-up action on the report’s findings, she said.

Low public participation

The Open Budget Index released today measures the transparency of national budgets by looking into three main areas, namely the level of budget transparency, the degree of public participation, and the strength of the oversight institutions in the legislature and government audit body.

It is published by the International Budget Partnership, in collaboration with the Institute for Democracy and Economic Affairs (Ideas) as the local research partner in Malaysia.

The survey is conducted using a 140-item questionnaire, drafted based on standards set by International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD), and the International Organisation of Supreme Audit Institutions (Intosai).

The bulk of the points scored in the questionnaire goes into the Open Budget Index, totalling 109 of the 140 questions. This year’s survey is done based on Malaysia’s 2014 budget documents.

Meanwhile, Wan Saiful expressed concern over Malaysia’s low score in the area of legislative oversight and public participation, pointing out that even Papua New Guinea outperformed Malaysia in both areas.

“The scores indicate that our parliamentarians hardly have a chance to influence how taxpayers’ money is spent, despite the budget speech being a major event in our parliamentary calendar,” he said.

The next budget is expected to be tabled in parliament next month for the year 2016.

Not enough info in budget proposal

Explaining Malaysia’s poor performance, Sri Murniati said one of the reasons is because of the lack of information in the government’s budget proposals.

Among the information that ought to be in the proposal, she said, includes an analysis of how changes to the proposal’s macroeconomic assumptions would affect estimates provided in the proposal, such as how government revenue would be affected if there is less global trade than anticipated.

Also missing from the budget proposal is up-to-date information on the government’s contingent liabilities. She said she was only able to obtain figures for the year 2012, although the research was based on 2014 documents.

As for the poor score for public participation, Sri Murniati (photo) said the government only consults the public in formulating the budget, and even then, the discussions are not focused as there is no clear outcome expected from the discussion.

In comparison, in South Korea, which holds the best score in public participation, there are several stages in a budget cycle where members of the public can provide input, and the consultation sessions usually have a clear agenda such as, ‘How to design programmes for senior citizens’ or ‘How to increase childcare investment and improve childcare programmes’ which were among the issues discussed in 2012.

There is even a Budget Waste Report Centre in South Korea, she said, which has a hotline that members of the public can call if they suspect that taxpayer funds are being squandered, such as if contractors miss deadlines or if there is suspicion of corruption.

In the area of parliamentary oversight, Sri Murniati, who manages Ideas’ Political Economy and Governance Unit, said the Malaysian parliament has parliamentary researchers but they do not contribute in researching the budget.

Parliamentarians also are not privy to the content of a budget proposal until it is tabled, and once tabled, they have limited time to scrutinise it and limited ability to change it, she said.

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